Unbundled Providers Make Sense for Small Plans

By Buddy Horner, Director, Bronfman Rothschild Plan Consulting

Workplace retirement plan sponsors have a number of responsibilities to fulfill when selecting service providers. Service providers help perform three important functions of 401k plans: record keeping (processing transactions such as contributions, loans, distributions, website access, reporting); third party administration (TPA) (compliance, plan documents, non-discrimination testing); and investment advisory (management of investments).

One decision a plan sponsor must make is whether to select a bundled or unbundled provider of these three services. With a bundled model, a plan sponsor selects one provider for all the record keeping, administration and possibly investment services. Bundled service providers serve as a one-stop shop generally offering one standard plan with less flexibility. In an unbundled plan, the plan sponsor selects services from a combination of independent service providers. This enables the plan to pick best-in-class service providers including investment options.

Interested in reading about bundled and unbundled retirement plan services?

Tell us a little about yourself to learn more:

  • The trade offs between a bundled plan and an unbundled plan
  • What factors you should consider in choosing which plan to implement
  • The top reasons why providers choose an unbundled plan